Perhaps taking a cue from the recent announcements of musicvideo channels incorporating home shopping, MTV will begin testing shopping programming on its MTV, VH-1 and Nick at Nite cable channels in April.
If successful, the musicvid channel says it will establish a stand-alone shopping channel that will offer concert tickets, merchandise, videos and music products to viewers by as early as spring 1995.
“MTV Networks is in the perfect position to capitalize on the growing success of our well-established brands by participating in the rapidly growing home television shopping market,” said Tom Freston, chairman/CEO of MTV Networks.
The news comes on the heels of reports that Sony and Time Warner have been in discussions to start their own musicvideo channel that would compete head to head with MTV. The new channel also will have home shopping capabilities.
Tele-Communications Inc. and BMG announced last summer their joint venture to provide similar programming, and Florida-based MOR Music said in November it would launch five channels combining music and merchandise.
“We’ve had this idea in development for two years now and done a lot of focus groups and studies,” Freston added. “The plan is to sell only entertainment-related items like CDs, books, videocassettes, videodiscs and videogames. We’ll be nothing like the non-thematic shopping channels on the air now, which sell a set of knives one minute, a jigsaw puzzle the next and then follow with a radar detector.”
Freston explained that throughout the test, “there’ll be no more than four hours a week of shopping on any of the networks.” The shopping programs will be a half-hour each, and “we’ll rotate them throughout all the dayparts,” he said.
MTV will return 5% of any revenues that flow in through the shopping half-hours to the cable operators within their local service areas, according to Freston. If the test becomes a 24-hour home-shopping channel, cable systems would continue to pocket 5% of the revenues within their service area and wouldn’t have to pony up any monthly per-subscriber license fees.
MTV will target the home-shopping items to its core demographic — adults 18- 49 and viewers who will be able to make their purchases by calling a toll-free telephone number.
The shopping programs will be hosted by celebrities and offer merchandise spanning all the music genres.
“An increasing percentage of recorded music purchases are being made directly from the home through record clubs and mail-order sales,” Freston said. “With our new shopping programming, we will be well-positioned to take advantage of this trend.”
With music sales at traditional retail outlets remaining flat last year, record clubs are the one industry bright spot logging double-digit gains through mail order.
Freston said MTV is continuing its plans to launch three musicvideo channels, dubbed MTV 1, 2, 3, as part of an expansion plan “to aggressively pursue opportunities to build our franchise.”
But Freston acknowledged that “the channel crunch is still on,” saying the digital-compression technology that promises 500 channels to every cable system may be further away than the true believers are predicting.